Tax expert Haq says honesty can’t cut it when it comes to collecting taxes.
ISLAMABAD: Midway through the Pakistan Tehreek-e-Insaf (PTI) government’s tenure, it seems safe to say that “honest leadership” is not enough to collect taxes and increase tax base in Pakistan, top tax expert of the country Dr Ikramul Haq said in the Express News programme, The Review.
The renowned tax expert noted that enforcement of laws and use of technology were keys to achieving tax collection targets for the Federal Board of Revenue (FBR). “If tax collection can be increased through honesty alone, we should request Maulana Tariq Jameel to head the FBR,” Haq quipped.
The comment came in the context of Prime Minister Imran Khan’s strong belief during his election campaign before the 2018 elections that an “honest leadership” could convince people to pay taxes and become a tax-compliant nation.
However, his government has struggled to motivate the people to adopt the tax culture even after two years in power.Commenting on the issue of non-residents becoming exposed to taxes due to a legal lacuna, Haq urged the government to relax the definition of non-resident person to one year to facilitate those who were stuck in the country due to suspension of air travel owing to Covid-19.
Haq was of the view that the government should make a general rule to facilitatethe people instead of waiting for them to individually plead their cases regarding overstay due to the pandemic as scores of non-resident persons have accidentally become Pakistani residents.
Under the Income Tax Ordinance 2001, a person will be treated as a resident Pakistani if he stays in Pakistan for 120 days or more in a tax year.In June last year, an amendment was introduced in the income tax law by former FBR chairman Shabbar Zaidi to reduce the stay period of individuals from 182 days to 119 days in a bid to expand the web for offshore assets.
Sources said that many Pakistanis, who were working in the Middle East and Europe, were affected by the legal change. They got stuck in Pakistan for monthsdue to suspension and restrictions imposed by various countries on air travel to contain the deadly pandemic.
Among other things, Haq also suggested that the FBR should proactively send tax returns to the people and gauge its response, saying that filing tax returns is a difficult process for a common man.
During the programme, it was revealed that roughly 6.5 million people holding National Tax Numbers were supposed to file tax returns but as many as 4.7 million or 72% of them did not.Meanwhile, the hosts also discussed the UAE visa suspension issue and conflicting statements made at the highest level.
Senator Enver Baig revealed that Pakistan is losing around 800 to 1,000 jobs daily because of the continued ban on work or employment visas by the UAE, urging the government to take theissue seriously to support employment as well as remittances.
Special Assistant to Prime Minister on Overseas Pakistanis Syed Zulfiqar Ali Bokhari and PTI leader Andleeb Abbas were invited to attend the show but despite their prior commitment they backed out at the last moment.